FT reports small profit under new Japanese owners

The Financial Times has reported a small profit for its first year under Japanese ownership, following its debt-fuelled £844m takeover by the publisher Nikkei.

Accounts for The Financial Times Limited, the main operating company, which excludes some overseas businesses, reveal a pre-tax profit of £6.2m for 2016 on revenue of £310.7m.

Sales were up 9pc from 2015, but profits were down sharply, as that year included a one-off benefit of £475m from the sale of a 50pc stake in the Economist magazine. The cash was withdrawn as a bumper dividend by Pearson, the FT’s previous owner.

There was no dividend for Nikkei in its first year as owner of the 129-year-old title. Over the course of the year it injected more than £74m cash into the FT, which was required under the takeover terms to pay £90m into the Pearson final salary pension scheme to help cover a funding shortfall.

Nikkei bought the FT using cheap bank debt, which its accounts reveal is charged at an interest rate of just 0.29pc. The Japanese financial publisher said it wanted to help turn the FT into a global player, although in the first year there was little change in its sources of income. The UK accounted for 44pc of revenues, the same as in 2015, with Europe on 26pc, down slightly. Asia and the Middle East on 11pc of sales, up from 9pc.

There was more change in the type of sales. As print advertising sales and circulation declined, the FT’s digital advertising and conferences accounted for a larger share of revenues, increasing from 19pc to 22pc over the year.

The FT’s senior managers have ­remained in place in the wake of the Nikkei takeover as the company prepares to move from its Pearson-owned Southwark HQ back to Bracken House in the City, where it was based from the Fifties until the Eighties.

The highest-paid director, understood to be chief executive John Ridding, received total compensation of £1.7m, an increase of £75,000 on the prior year. Meanwhile the overall FT wage bill came down by £6.5m to £81.4m.